Question:

My question concerns some shop here in Australia. Sometimes here in Australia shops offer to buy a product with for example 3 years interest free. After the 3 years and if the customer did not pay the full price an interest will apply for the remaining of the price. Is that Riba?

Fatwa:

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad is His slave and Messenger.

These types of transactions are not permissible because if the buyer delays in paying the cost of the product, interest will be added for the delay, and this is Riba in itself and it is forbidden. This is similar to the known saying of the people of the time of ignorance before Islam "either you pay the debts or pay interest''.

And the Prophet has cursed the one who consumes Riba (interest or usury), the one who gives it to others, the one who records it and the one who is a witness in the Riba transaction. He said: “All of them are equal in Sin”. [Muslim]

Allah Knows best.

Fatwa answered by: The Fatwa Center at Islamweb